OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

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Income, wealth and earnings inequality in Australia

Evidence from the HILDA survey

This paper analyses income, wealth and earnings inequality in Australia, using the Household, Income and Labour Dynamics in Australia (HILDA) Survey as the primary source of data. Income inequality in Australia has risen in the last two decades, but most of the rise occurred prior to the global financial crisis. HILDA data nevertheless show evidence of slower income growth in the middle of the income distribution compared with the top and the bottom. While Australia has experienced a rising inequality in wages – mostly through rapid earnings increases among top earners - this has been offset by increased participation and longer hours worked at the bottom of the distribution. According to HILDA data, relative pay across different levels of education groups has not recorded large shifts over the last 15 years. At the same time, we find evidence for job polarisation; notably, the share of high skilled jobs versus middle skilled jobs has increased. With respect to concerns about the casualisation of the labour force and less stable nature of jobs amid technological change and globalisation, the incidence of casual employment – where workers receive no paid sick leave or holiday leave - in Australia has been reported to have risen since the 1980s, especially for females. According to HILDA data however, the incidence of casual employment has fallen since early 2000s. Furthermore, we find no evidence that contract duration has shortened over time.


Keywords: HILDA, wealth inequality, income distribution, inequality, Australia, income mobility, job polarisation, earnings inequality, household panel
JEL: J3: Labor and Demographic Economics / Wages, Compensation, and Labor Costs; D31: Microeconomics / Distribution / Personal Income, Wealth, and Their Distributions; J2: Labor and Demographic Economics / Demand and Supply of Labor; E24: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
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